At a recent far-left conference in Britain, American socialist Bhaskar Sunkara wondered why so many of his fellow New Yorkers are relocating to Florida.
We're actually now fourth in population, people keep moving to Florida, I don't know why. People don't like the winter.
Sorry, Bhaskhar, but it ain't the weather. It's the taxes.
While Sunkara's delusions are often easily apparent, his inability to figure out the great New York exodus is striking. Because the data explains everything: In New York, income tax rates range between 4 percent and 8.82 percent, and the corporate tax rate is 6.5 percent. In contrast, Florida has no income taxes and its corporate tax rate varies between 3.3 percent and 5.5 percent.
That dichotomy is bad enough for socialists like Sunkara, but President Trump's tax reform has made things worse. That's because tax reform has reduced unfair subsidies to high-tax states. Specifically, it has capped deductions of state taxes on federal income tax payments. And that change isn't just good policy, it's moral policy. After all, it was unfair that federal income tax rate-equivalent residents of Florida were paying proportionately more of their income to the government than their New York counterparts. Another beauty of this reform is that it invites greater skepticism of state-level government spending and tax rates.
For socialists, these changes are a disaster. It isn't simply that the exodus to low tax states represents a profound repudiation of socialist tax and spend policies, it's that the exodus drains liberal governments of the tax revenue they need to be liberal!
In Illinois, for example, the pension liability crisis is joined to a high tax, low-efficiency government. And like New Yorkers, Illinois residents are paying notice by relocating their families and businesses elsewhere.
The more honest far-left activists accept this truth and propose limiting capital flows in order to obstruct it. In states like New York, we're already seeing authoritarian measures to prevent their residents from relocating. But for the most devout socialists like Sunkara, the purity of socialist dogma comes before policy responses. They cannot see why anyone would wish to live outside of liberal states, and so they ignore the need to engage and retain residents. They instead champion idiotic ideas like "degrowth" to make the grass less green everywhere, lest more Americans vote with their feet.